Air Canada Doesn't Need New Bombardier Jet

LUANN LASALLE On Feb 6, 2007
Source: The Canadian Press

MONTREAL (CP) - Air Canada is already renewing its fleet and CEO Montie Brewer said Monday that the mainline carrier wouldn't be interested in buying Bombardier CSeries planes until 2015 at the earliest.

Brazil's Embraer now supplies similar-sized planes to Air Canada with between 75 and 95 seats, Brewer said in an interview with The Canadian Press.

Brewer said there have been discussions with Bombardier about the CSeries, to seat 110 to 130 passengers.

''If they (Bombardier) design it the way they plan on designing it and they can make their cost targets, I think they'll have an airplane that will be well-received by the marketplace,'' Brewer said.

But he said Air Canada is satisfied with the offering by Embraer, a Bombardier competitor.

''It's meeting our expectations in terms of efficiency,'' he said. ''Our customers love it, our employees love it, so I don't see us really changing our decision now, but talk to us in 2015,'' Brewer said.

''We already have that part of our marketplace met, but there's a lot of airplanes coming up for retirement that size that I think Bombardier and Embraer and I think the other manufacturers will go after.''

Bombardier has announced it will launch the CSeries by 2013 and said it's in talks with international partners for the project. It has estimated the potential market at 5,800 CSeries aircraft over the next two decades.

''The fleet plan already has been determined, so in order for them (Air Canada) to order the CSeries they would have to change their fleet and there's no indication or reason that there's been any consideration in that,'' Hueniken said from Toronto.

Professor Karl Moore of McGill University also said Air Canada already has done a lot of fleet renewal and talking about buying CSeries planes years down the road is an open question.

''We're talking 10 years from now and it's an uncertain world,'' said Moore, of McGill's Desautels Faculty of Management.

Brewer made the comments on board a Boeing 767 that was being refurbished in an Air Canada hangar.

''We're also one of the lead customers for the Embraer 190 and the Embraer 175, which are small aircraft. They're 75 and 95 seats; the 190 is the larger one. We call them game-changing airplanes because they bring new technology that will change how aircraft are used.''

Composite materials, fuel efficiency and wing design make a cost-effective, customer-pleasing smaller airplane with ''transcontintental capabilities,'' he said, adding these planes can fly to Montreal-Denver or Toronto-Fort McMurray, Alta., for example.

''It gives us more non-stop markets, which gives us a tremendous opportunity to improve the product for our customer.''

Air Canada currently has 15 Embraer 175s in service and 18 Embraer 190s in service out of 45 to be flying by the end of 2008.

Air Canada announced its combined Embraer and Bombardier regional jet order in December 2003.

The first 350-seat Boeing 777 is scheduled to arrive in March and seven others will be delivered by the end of this year.

Air Canada employees were busy working on the interior of the 767 while Brewer talked about the refurbishing of the plane, which includes new seats with computer screens, plugs suitable for IPods and Blackberrys, so-called lie-flat beds in business class and new ''mood'' lighting as well as carpet.

''We're replacing every seat on every aircraft across the entire fleet. So by the middle of 2008 every seat will be replaced to the same standard, which is a standard power plug...and more importantly on-demand video on every seat.''

Brewer also said new-technology aircraft will have a longer lifespan and will need less frequent maintenance, resulting in cost savings.

''As electronics become more sophisticated and more lightweight and efficient, there's ways to actually monitor the airplane's health a lot easier and better maintain it.''

Air Canada, a subsidiary of parent company ACE Aviation Inc. (TSX:ACE.B) has become a publicly traded company again after emerging from bankruptcy protection in 2004.

The Montreal-based airline is competing with both low-cost and legacy carriers.

Air Canada A shares closed at $18.15, down 15 cents on the Toronto Stock Exchange, while Bombardier shares slipped two cents to $4.75.